Given that a large number of Wal-Mart’s regular customers would get used purchasing various items online, the number of customers who will be dropping by Wal-Mart store outlets would eventually decrease. The shift from traditional shopping to online shopping will enable the company to cut down the number of its employee which will reduce its customer-borne transaction costs.
Yes. In general, the use of web-site services and Wal-Mart’s decision to close a deal with Fingerhut Business Services and Books-a-Million enables the company to reduce its operational costs. (Zellner, 1999) Given that Fingerhut Business Services and Books-a-Million has the expertise on distributing the customers’ orders directly to their home (Zellner, 1999), there is a lesser chance for Wal-Mart to have serious problems related with the transportation of goods from the warehouse straight to its customer’s home.
Aside from the huge reduction on the cost of operations, the fact that Wal-Mart announced its plan to expand its online store service will enable the company to have take advantage of economies-of-scale. Since the company has already invested on Wal-Mart.com, expansion of its online store offerings is expected to open new business opportunities for Wal-Mart. Since Wal-Mart will be able to save a lot of money from operational costs, the company will have the competitive advantage of being able to offer consumer products at a discounted price.
Yes. It is most likely that Wal-Mart will capture the value created by Wal-Mart.com. Since the website is accessible 24/7, the use of Wal-Mart.com can reach millions of people around the world. For this reason, more people in other countries will be able to acknowledge the brand Wal-Mart.
As soon as Wal-Mart has already dominated the domestic market, the management behind Wal-Mart will have to start expanding its business in the international market.